TLC Vision Corporation Files Chapter 11 Reorganization

ST. LOUIS, MO—TLC Vision Corporation (TLCV) (TSX:TLC), has reached an agreement with the holders of a majority of the company’s senior secured debt to restructure its balance sheet.

To expedite its financial restructuring, which includes a pre-arranged plan of reorganization, the company and two of its wholly owned subsidiaries, TLC Vision (USA) Corporation and TLC Management Services Inc., have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Additionally, the company is seeking a recognition of its Chapter 11 filing in a case that it is commencing in the Ontario Superior Court of Justice under the Canadian Companies’ Creditors Arrangement Act. No other company operations, affiliates or subsidiaries—including its TLC Laser Eye Centers—are involved in the filing.

TLCVision said clinical care for patients continues without change or interruption and they will continue to honor the TLC Lifetime Commitment. The company also said the filing will not affect its on-going commitments to current employees.

Jim Tiffany, TLCVision president and COO said, “After evaluating a number of strategic alternatives with our board of directors and advisors, we decided that restructuring our debt through court protection was the best way to preserve the value of our business. We expect to emerge swiftly from Chapter 11 with a stronger balance sheet.”

The company reached an agreement with a group of its senior secured lenders on a Chapter 11 plan of reorganization that provides for the following: a conversion of certain of the funded indebtedness to 100 percent of the new equity of TLC Vision (USA) Corporation, which will emerge as a privately held company; reinstatement of the balance of the funded indebtedness on restructured terms and conditions; payments to employees and critical vendors in the ordinary course of business; and distributions to certain secured and unsecured creditors. There is no assurance of any distribution of funds to the shareholders of the company under the plan.

On Jan. 4, 2010, TLC Vision Corporation said that the Ontario Superior Court of Justice had granted approval for the use of $7.5 million of a $15 million debtor-in-possession financing facility; continued payment of wages, salaries and other employee benefits; authority to use the company’s cash collateral; and authority to pay certain critical vendors in full.■